Radisson Hotel Group (RHG) recently outlined ambitious development plans across the South East Asia and Pacific region (SEAP), which will see its upper upscale hotel brands Radisson Red and Radisson Blu, as well as luxury lifestyle brand Radisson Collection, expand to key capital cities and primary tourist destinations across the Phillipines, Sri Lanka, Thailand, and Vietnam.
Radisson Hotel Group, Chief Development Officer, APAC, Ramzy Fenianos, spoke exclusively to HM about the group’s SEAP strategy.
How has Radisson Hotel Group performed in the SEAP region over the last 12 months?
Radisson Hotel Group has established a strong market position in South East Asia and Pacific particularly in emerging cities and markets. Notably we have significantly grown our presence in Vietnam, Thailand and Sri Lanka over the past few years, with more developments to come.
Our growth strategy is asset-right, across leased, franchised and managed business models and we’ve also been seeing more opportunities for conversion projects. 2023 was a pivotal year for RHG where we expanded our relationship with key partners and operators.
We signed a Master Collaboration Agreement with La Vie Hotels and Resorts which is set to add 30 hotels to our portfolio over the next decade across the SEAP region, which builds on the successful conversion and opening of three hotels in 2022. In the Philippines, we expanded our decade-long partnership with SM Hotels and Conventions Corp through a Master Development Agreement to reach 20 hotels by 2028 from six hotels in operation today.
Evolving guest preferences continue to shape our strategy in each of our markets, and our clear and distinct brand architecture featuring 10 unique brands are designed to be relevant to both owners as well as our guests.
What SEAP markets are a key focus for Radisson Hotel Group and why?
As we continue to lead on our growth and expansion plan, we are focused on strategic geographical expansion in both capital cities and emerging destinations. In terms of focus markets, we have bolstered our local Business Units in locations where we currently operate such as Bangkok and Sydney, which will enable us to drive enhanced collaboration and support for our owners and partners.
We’ve also added local language capabilities and local management offices to better serve our owners in each market. As we have gone on to foster greater strategic, growth and experience more conversion opportunities through our partners in our markets, our Business Units have expanded in major strategic areas like Ho Chi Minh City, Jakarta, Manila, and Seoul.
Our development strategy will continue to be focused on curating the right business model and offering for travellers, at each location in collaboration with the right partners who have proven market success.
In Thailand, we have signed seven new hotels with over 1,300 rooms since the start of 2022 and introduced three new brands to the market including Radisson Red, Radisson Individuals, and Park Inn by Radisson in strategic locations such as Phuket, Pattaya, and Bangkok. This expansion aims to tap into new market segments and create opportunities for growth.
Vietnam has also been a focus, with four hotels already open and eight in the development pipeline, including upcoming openings in sought-after coastal locations such as Mui Ne and Hoi An, along with the signing of the first Radisson Red in Danang.
While in Philippines, we closed the year with a further two new signings that will launch the Radisson Collection brand in Boracay, and the Radisson Individuals affiliation brand in Bohol.
What makes Radisson Red and Radisson Collection suited to this market?
In these markets, we are seeing a growing appetite in the lifestyle segments that is not just limited to the luxury segment. Against the backdrop of rising costs and inflation, travellers are increasingly conscious of value for their dollar, whilst seeking out new travel experiences accompanied with the assurance of a safe, comfortable stay at full-service hotels. This why our lifestyle offerings including Radisson Red and Radisson Collection have been well received, and why we have big expansion plans for these brands.
Radisson Red, our design-led lifestyle brand, is well-suited to the upscale and upper-upscale market segment in vibrant urban or city-centre destinations. The brand has the power to inject new life into hotels and destinations and combines bold interior design as well as vibrant social spaces that owners can either operate independently or outsource, giving them plenty of flexibility to maximise their return on investment.
Radisson Collection is a luxury lifestyle collection of hotels and resorts, boasting unique locations in each destination. These iconic properties are based on the pillars of authentic local influence, living design, and a vibrant social scene and enable guests to enjoy the benefits of an aspirational lifestyle. Created to unlock owner value, the brand offers opportunities within the premium market categories targeting the entry-affluent travellers.
What segments are primed for growth in this region?
In the recently released Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), Asia Pacific’s luxury, upper upscale, and upscale chain scales each hit peak project counts at the end of Q3 and account for 53% of the projects in the region’s hotel construction pipeline.
This reflects RHG’s pipeline and our recent announcement about our plans to continue to expand our bold (upper) upscale hotel brand Radisson Red brand in Danang, Vietnam; Phuket, Thailand; and Cebu City in the Philippines, featuring stylish spaces with standout design.
The Radisson Collection brand – a luxury lifestyle collection of iconic properties in unique locations – will soon enter Southeast Asia and Pacific with upcoming openings in 2024 in Galle (Sri Lanka) and Boracay (the Philippines). The Group will also continue to accelerate the growth of its upper upscale Radisson Blu brand with new properties in the pipeline for Colombo, Sri Lanka and Hoi An, Vietnam.
Why is mixed-use development an important focus for Radisson Hotel Group?
Radisson Hotel Group remains committed to innovating our business models, collaborating closely with owners and developers to find the right strategy and approach to maximise the value of their assets by leveraging the strength of our brands.
We are having more conversations with developers for mixed-use projects integrating hotels with residences, offices, and other retail and commercial assets. This is especially so in major urban centres where developers are looking to diversify their portfolio to manage higher land acquisition, construction costs as well as financing from banks. This empowers investors to diversify revenue streams, maximise returns, effectively allocate development and operational costs, whilst offering a distinct and all-encompassing guest experience.
Apart from providing promising opportunities for revenue optimisation, mixed-use developments can also present a significant potential for promoting sustainability and environmentally conscious hotel development. This potential extends to retrofitting existing infrastructure and seamlessly incorporating hotels into pre-existing commercial and retail spaces.
We will continue to keep our fingers on the pulse of the market, to offer relevant solutions for mixed-use products to capitalise on the ever-evolving hospitality landscape.